Lab operators and physicians await new policies under "NegReg" - US Health Care Financing Administration to finalize Medicare payment policies - Brief Article

Medical Laboratory Observer, May, 2001 by Joan Szabo

Lab operators are still waiting for the Health Care Financing Administration to finalize the proposed changes recommended by the Negotiated Rulemaking Committee. Even though the committee completed its work on uniform coverage and payment policies well over a year ago, the rules have yet to be finalized by HHS.

Once in place, they would establish uniform coverage and payment policies for lab services under Medicare Part B. The aim is to provide greater uniformity in the way Medicare carriers handle lab reimbursements.

The Negotiated Rulemaking committee made recommendations for 23 priority tests, which compose 60% of all lab claims. The lab tests include blood glucose, thyroid testing, fecal occult blood, hepatitis panel, and blood counts.

The rules "spell out the diagnostic codes that would be considered satisfactory for payment for these various tests," says Mark Birenbaum, PhD, administrator for the American Association of Bioanalysts (AAB) in St Louis, MO.

While lab operators are eager for the rules to be finalized, physicians also have made it known recently that they want action from HHS as well. At a recent Practicing Physician's Advisory Council meeting, Ross R. Black II, MD, an American Academy of Family Physicians (AAFP) board member, complained that local medical review policies have "created an administrative nightmare for physicians."

The problem is that the local policies are not comprehensive enough with regard to covered diagnosis codes associated with a given lab test. In addition, the policy for a given lab test seems to differ from carrier to carrier. This means physicians serviced by multiple carriers have to understand multiple policies for the same test. This is difficult for physicians to do, Dr. Black contends, because of all the other regulations with which physicians must comply.

Dr. Black recommended that HCFA establish more national policies in place of multiple medical review policies for the same service. He said AAFP hoped "the negotiated rulemaking process in which HCFA engaged would address at least some of these concerns." However, the problems associated with local medical review policies still remain.

More uniformity sought

From both the lab operators' and physicians' perspective, there is little doubt that Medicare's payment policies should be more uniform. A recent report on Medicare laboratory payment policies from the Institute of Medicine recommended that laboratory payment be based on a single, rational, national fee schedule that reflects resources used to perform the service.

AAFP also asked HCFA to consider prohibiting its carriers from establishing local policies for laboratory tests not covered by national policy. Dr. Black contends that "if HCFA has not deemed a particular lab test as problematic enough to establish a national policy, then the test does not require a local policy, either."

In an earlier interview with MLO, Dr. Black said AAFP is disappointed that the federal government hasn't carried out "any further regulatory change to limit the level of involvement of the local carriers in setting standards and criteria" for the payment of lab tests. He says the work of the Negotiated Rulemaking Committee should help with the current situation "as long as those standards are national standards and not amended or added to by the regional carriers."

In fact, "NegReg" was designed to do just that, as far as the 23 lab tests are concerned. But there are other lab tests that are not covered, and those will still be subject to local medical review policies. "A national policy (on lab charges) would really override the local medical review policies," Birenbaum explains.

Another issue that remains unresolved between physicians and lab operators involves liability for lab tests that are ordered by doctors, but are not considered medically necessary by HCFA. Physicians don't want to assume liability for the cost of those tests, nor does Medicare, says Birenbaum. As a result, labs are often stuck with the charges, he contends. "Physicians have to address the issue. They can't absolve themselves of all responsibility for this."

As far as finalizing the work of the Negotiated Rulemaking Committee, there doesn't seem to be much urgency within HHS to get "these rules done even though apparently everybody has agreed to them," Birenbaum says.

Part of the problem, Dr. Black believes, is the transition from the Clinton to the Bush Administration. In addition, bureaucrats within HCFA are still waiting for the arrival of a new administrator. Because agency personnel are not sure what direction a new administrator will take on many provider issues, they are not willing to move forward and act until they receive direction from the new administrator.

But physicians are making their priorities known. During the Practicing Physician's Advisory Council meeting, AAFP gave HCFA five of the top priorities it would like the agency to address. The laboratory issue was one of the five, Dr. Black points out.